How to Know When Your Business Idea Is a Good One

Wondering if your new business idea is worth pursuing? Pay attention to whether people are drawn to the idea right away.

How do you really know if your idea for a new business is a good one? For me, there's always been a litmus test I like to call the "moth to the flame" effect. It's a way to find out early if your idea will catch on and if it will generate enough excitement.

Here's an example from my personal life. At one time, I wanted to be a songwriter. This was back in the late '90s, before the days of The Voice and other talent competitions. Not that I ever would have made it that far, or that they even had competitions for songwriters. It was always a side hobby to my day job as a corporate-management type. (Looking back, it was also an early indicator that I was not happy in my career and needed to break free.)

Using my trusty Takamine guitar (turns out it was exactly the same model Bruce Springsteen uses) and scratching out lyrics and chords on a notepad, I managed to write about 100 songs in just a few months, usually in the late evening hours when I should have been sleeping. I was in a band that went on tour, I learned how to perform on stage, and I even went down to Nashville to pitch my ideas to an A&R rep. I knew I was never going to be Garth Brooks, but I had the idea of maybe writing a song for him.

During these years of intense creative output, I slowly realized there was a problem. A few times, I did "showcase" concerts with a vocalist that were really a way to present my songs to the world. One fateful concert took place in a bookstore. I remember how I broke a string during the final song and felt embarrassed enough to just end the concert. (Apparently, that's a sure sign of an amateur.) Hardly anyone noticed, because hardly anyone was paying attention. The songs were not that good. My wife even told me on several occasions that I should maybe look for a different creative outlet. Like, ice sculpting or maybe rugby.

The material wasn't that bad, and it was a good outlet for me, but the stark reality is that people were not drawn to the songs. I've since realized that good ideas--whether for a mobile app, a new way to manage your business contacts, or a retail store uptown--attract people right away. Things that are truly novel and unique tend to burst into the mainstream with vigor. Granted, there are ideas that germinate over a long period and don't attract attention. You can put resources behind them and exert a tremendous amount of marketing chutzpah, but they still take a while to catch on, and I'm not saying you should give up on an idea you know has serious staying power.

Yet we all seem to recognize talent, creativity, and novelty. I was reminded of this when I heard about how Tom Magliozzi, the co-host of the NPR show Car Talk who died this week, started his career in radio. From what I understand, he was called into a panel discussion at the last minute on another radio show back before he had his own show. After one program, someone noticed his talent and created a show that lasted for decades. People just knew he had a knack for radio. The idea burst into being.

I suppose this "moth to the flame" litmus test is somewhat similar to the idea of the pivot. If you have an idea that is not going anywhere, it's wise to make a radical change that will redirect your efforts. It's smart to make iterative changes. Yet the litmus test for an idea is more about paying attention to what catches fire early on. The "moths" can come from all areas of life: when your family members keep talking about the idea, when you post about your startup on Twitter and people retweet the idea like crazy, or when journalists pick up on the idea and start writing about it as novel and exciting.

More important, it's a good idea to pay attention to a serious lack of interest. Does the idea fall flat right away? Do you hear nothing but crickets chirping and the drone of silence? For me, I should have realized my songs were not generating any buzz at all. They were not gaining momentum. At concerts, people came over to the stage out of curiosity, but they didn't stick around. No one asked to buy a CD or when they could hear the songs again. I didn't need to pivot my songwriting; I needed to bury it.

Eventually I did. I ended up letting the dream of being a songwriter die a slow and painful death, and shuttered all hopes of feeding songs to country stars. As it turns out, just a few months later I started writing professionally after all, but not in the music field. It wasn't a pivot; it was closing a chapter and starting a new one. I'm still writing it.